RutDog, I'm not sure I agree with your analysis. My point is that in a recession, there is a glut of rooms and therefore the value of a room decreases. At the same time, HH is increasing the price in points of these rooms. So its an unjustified double-whammy.

I believe your point is that its Simply Good Business to raise the redemption levels to get people to pay in cash instead of points. I agree with your view of human behavior to prefer to conserve cash. However, if you extend this logic, then Hilton should raise the cash prices of their properties as well, since this will bring in more revenue per room.

What your analysis leaves out is that a lot of us would not spend $300+ per night at HWV if we had to spend cash. As pointed out, HH fails as a loyalty program and I'd happily accept a 50%+ discount to use priceline and stay at a comparable or better property.

Or to extend your argument a little further, Hilton should advertise one price and raise it once the guest arrives. Isn't that what Hilton has done with the HH program? I feel they have.

I estimate a HH point is worth $.0068 to me assuming I'm redeeming a VIP award. I get that by figuring a room is worth at most $200 a night times 6 nights divived by 175,000. For $200, I can stay at what is probably a better boutique hotel or pay less and get something comparable on Priceline, even in Europe these days. Not being diamond, when you deduct for capacity controls and similar factors, the risk of future devaluations, etc., I'm not sure its worth the effort. I'm shifting more of my spending to cash back credit cards.

P.S. I don't mean to challenge you, but I'm left unpersuaded. I appreciate the back and forth, and hope you do to.